The Rational Expectations School Advocates the Passive Rule of a Fixed-Growth

question 96

Multiple Choice

The rational expectations school advocates the passive rule of a fixed-growth rate monetary policy because _____

• A) policy makers often do not have enough information to pursue an active policy.
• B) active intervention is required only if an economy is in recession.
• C) a large bureaucracy can be eliminated by following the passive approach.
• D) people render active policy ineffective by figuring out what it's going to be and taking actions to offset it.
• E) they prefer to emphasize an active fiscal policy.

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Definitions:

Audience's Perspective

The point of view or attitude of the intended recipients of a message or communication.

Common Mistakes

Errors or oversights that are frequently made in a particular context, often due to misunderstanding or inattention.

Persuasive Communication

The process of using messages, arguments, and stories to influence others’ attitudes, beliefs, or actions.

Avoid Them

Advice often given to steer clear of certain behaviors, individuals, or situations that may be harmful or counterproductive.